2601 Main Street
Suite 200
Irvine, CA 92614
(949) 221-8105 ext 2128
[email protected]

Mike Loo, MBA

Vice President of Investments


How much money will you need in retirement?

| September 29, 2015
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Retirement.  It’s a stage in life that we’ve all dreamed about at one time or another, but how many of us are actually saving the right amount of money and know exactly how much we need to make this dream become a reality?  Many people conveniently choose to save the percentage up to which their employer matches in their 401(k) (oftentimes 6%), but will this amount be enough?  Saving in your employer’s 401(k) is a great start, but is this retirement savings vehicle sufficient to generate a rate of return that is in line with your risk tolerance and nest egg goal? 

Let’s assume you are 40 years old, earn $120,000 a year, and have saved $250,000 in your retirement accounts up to this point.  Assuming that you want to retire at age 65 with the same standard of living and with a considerable nest egg so that you do not run out of money in retirement, you will need to have a nest egg of approximately $5,675,000*.  Taking into consideration inflation and assuming you withdraw only the interest you potentially earn on your accounts, you will need to save approximately $50,200 each year for the next 25 years to reach this goal.  Note that this is far more than the amount which is matched in your employer’s 401(k).

If you’re not willing to push retirement past 65 and aren’t willing or can’t save the amount of money necessary, you could increase your investment risk for greater potential returns (but potentially lose more money along the way as well) or choose to live your retirement years at a standard of living less than your current one.  While people may claim that they can live off of less money later because they will have no mortgage and no kids to support, the reality is that other costs will probably come into play such as health care, long term care, and even assistance to other family members (ie parents, siblings, or even children)! 

To throw some realistic complications into the picture, what if you are sidetracked through a disability or critical illness such as a heart attack or stroke?  Imagine if you weren’t able to put that money away into your 401(k) or other savings account earmarked for retirement.  This could set you even further back from your retirement goal!  Stay tuned for a future blog about protecting the money you’ve worked so hard at accumulating or contact me to discuss how it can pertain to your personal situation. 

About Mike Loo


Mike Loo is an independent financial advisor with more than 20 years of experience in the financial services industry. His mission is to provide a meaningful impact on the lives of clients and the people they care most about, help them make educated decisions with their money, and build a strong financial foundation for both themselves and their next generation. Mike is committed to meeting a high standard of excellence, taking the time to listen to clients’ needs, and designing strategies that aim to help clients save money and reduce debt. He seeks to fit a client’s investments into their life and educate them so they’ll understand their investments. To learn more about how Mike may be able to help, connect with him on LinkedIn, call his office at (949) 221-8105 x 2128, or email him at [email protected].

Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Trilogy Capital, a registered investment advisor. Trilogy Capital and Trilogy Financial are separate entities from LPL Financial.

*Assumes a 3.5% inflation rate, 8% rate of return before retirement, 5% rate of return in retirement, and a 5% withdrawal rate in retirement.  All rates of return are hypothetical and are not indicative of any investment.  Does not take into consideration taxes and fees.

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